Published on: March 2, 2017 Last modified: October 21, 2020

Innocent Spouse Relief Concerning Tax Debt

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    Couples often divorce or separate to escape issues that arise during the marriage. Unfortunately, tax liability can still follow an individual around even after the separation takes place.

    Failure to Joint Filing

    In some instances, the IRS may inform a Michigan taxpayer that their estranged spouse failed to fully pay taxes regarding a joint filing. Such a taxpayer will be understandably concerned that the IRS may hold them accountable for this tax debt.

    Still, tax liability under such circumstances is not automatic. The IRS does in some instances provide taxpayers relief. This includes a type of relief known as “separation of liability.” Under separation of liability, the innocent spouse is only accountable for the liability allocated to them by the IRS.

    Seeking this relief can prove challenging, however. A spouse may be ineligible for such relief if found to have knowledge of the other spouse’s conduct. Disqualification may also occur if the spouse seeking relief transferred property for the other spouse with the purpose of avoiding paying taxes. (The IRS has various criteria on what would constitute knowledge regarding tax avoidance purposes during such property transference.)

    There are also a number of other rules that govern whether one is eligible for such relief. Entitlement for such relief requires a legal separation or a showing you are no longer married. The IRS also requires you as the spouse seeking relief to not reside in the same household.

    Contact your lawyer

    It can prove useful to discuss your circumstances with a tax attorney who can explain to you your various tax relief options. When requesting relief, it is important to not make mistakes that trigger red flags leading to the IRS taking action against you.

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